6 min readFeb 11, 2021 09:45 AM IST
First published on: Feb 11, 2021 at 03:02 AM IST
Often, people do not notice what the Union budget says about the Indian railways. The points that may register are the following. First, there is a National Rail Plan (NRP) for 2030. Second, the Western dedicated freight corridor (DFC) and the Eastern DFC will be commissioned by June 2022. Parts of DFC will be in public-private partnership (PPP) mode. Third, there will be an East Coast corridor (Kharagpur to Vijaywada), an East-West corridor (Bhusaval to Kharagpur/Dankuni) and a North-South corridor (Itarsi to Vijayawada). Fourth, all broad-gauge routes will be electrified by December 2023. And fifth, there will be safety and passenger amenity measures.
One hundred years before 2030, the Mumbai-Pune Deccan Queen was started. This is the only train with an official birthday — June 1, 1930. The Indian Railways has come a long way since then and down the years, several committees have probed its erosion in competitiveness and suggested solutions. However, in the historical evolution of the railways in India, the emphasis was on passengers, not freight. Parts of the country important from a freight perspective were bypassed. Therefore, even towards the end of the 19th century and first decade of the 20th, railways didn’t contribute as much to growth as it did in other countries.
“When the idea of constructing railways in India was first started, it was considered that there would be little passenger traffic on account of the poverty of the people, and that the chief business would be derived from goods.” That’s not what happened. This quote isn’t from the NRP. It is from an essay written in 1905 by N G Priestley, the first secretary of Railway Board — the counterpart of today’s Chairman Railway Board (CRB). The NRP was finalised in December 2020 and was sporadically reported in newspapers, in the draft and the final form. After the Union budget, some may have downloaded and read it, in the 49-page PPT style version. The more intrepid will read the 124-page executive summary. Only the most courageous will read the complete 1,178-page document. Among other things, the NRP is meant to increase the share of railways in freight, rectifying the pre-Independence and post-Independence bias, and develop capacity that will cater to demand in 2050. Most earlier committee reports concentrated on policies — financials, human resources, fares and cross-subsidies, competition, regulator, and investments. I am not aware of one that has mapped the existing railway network on a GIS platform and identified gaps. Perhaps technology has made it easier. In any event, that, and not mere length, is the NRP’s defining characteristic, making it a worthwhile exercise.
This change is not independent of those other policies, such as pricing and cross-subsidies. For instance, we talk of the railway’s operating ratio (OR). In 2018-19, as per the NRP, India’s OR was 0.59 for freight and 1.92 for passenger traffic. The problem is low passenger fares and artificially high freight rates required to cross-subsidise those. Actually, it’s worse, since normally, freight and passenger trains share common sections of track and passenger trains are given preference over goods trains in getting a path (route from point A to point B). Therefore, the average speed of a freight train is 24 km/hour — average speed is a surrogate indicator. A superior indicator is transit time — the time taken for a consignment to reach from one point to another. That also raises multi-modal issues. During the lockdown, there were fewer passenger trains (or none) and the average speed of the goods trains increased to 40 km/hour. But DFCs are meant to do that, aren’t they, be dedicated? In the process, they free up capacity elsewhere.
Most people know that Indian Railways has a system of HDN and HUN identification for the present network. HDNs are high-density routes. There are 11 HDN routes that connect metros with a single haul corridor. HUNs are highly-used networks with multiple origins and destinations and no clear single haul corridor. HDNs and HUNs carry 80 per cent of the traffic and there are sections where capacity utilisation is more than 100 per cent. With traffic increasing, capacity utilisation will worsen. HUNs are primarily for passengers. Hence, gauge conversion and electrification. For freight, HDNs are important and if the intention is to increase rail share in the total freight carried to 44 per cent, the average speed must increase (to say 50 km/hour) and costs must decline (say, by 30 per cent). With the Western and Eastern DFCs, both should happen. However, the comparison is relative, since roads will also improve, courtesy technology and Bharatmala.
There is nothing automatic about the railways gaining a competitive edge. Other than reiterating policy issues and listing operational procedures and constraints (wagon policy, haulage charges, terminal charges) within Indian Railways (which can be improved by breaking down silos), the primary value addition of the NRP is an analysis of the existing network, with expected additions (such as the National Infrastructure Pipeline) also built in. Even after doing this, gaps remain, as supplements to DFCs, HDNs and HUNs, not to forget terminals and sidings. These are places where one needs new tracks and investments. Historically, such decisions were often driven by political considerations and were ad hoc. NRP bases those decisions on objective criteria.
I should have mentioned the analysis of the existing network is disaggregated, commodity-wise. “Further to adoption of above-mentioned speed differential, reduction of 30 per cent in tariff has not been applied to commodities like coal, iron ore, raw material for steel and fertilisers. These commodities are traditional bulk commodities for railways and reduction in cost will not have much impact in increasing the share on railways. But for other commodities, reduction in cost will attract the commodities to use railways as preferred mode.” Not quite an a priori expectation.
This article first appeared in the print edition on February 11, 2021, under the title “The right track”. The writer is chairman, Economic Advisory Council to the Prime Minister. Views are personal
There is nothing automatic about the railways gaining a competitive edge 
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